Working in Riyadh

Working in Riyadh may promise the lure of generous, 100% tax-free salaries for well-qualified expat employees. Before you hop onto the next plane to Riyadh, though, you should familiarize yourself with the local economy and working conditions. Find more details in our Expat Guide below.

The new drive to diversify the Saudi economy and take the focus away from oil has created many new opportunities for expats.

Bear in mind that your visa sponsor is often your employer so you should stay on their good side since they often keep hold of your passport. The visa sponsor is also the person who must support an exit visa application.

Although wages are tax-free and, therefore, often higher than in your home country, you should make sure that you save for retirement as expats aren’t included in Saudi Arabia’s social security schemes.

The Saudi Economy

While living and working in Riyadh, you will be contributing to Saudi Arabia’s thriving economy, the largest in the Arab world. The national gross domestic product growth rate in Saudi Arabia has averaged at 4.91% between 1969 and 2015. As of July 2016, the GDP growth rate is 3.6%, making Saudi Arabia’s economy 13th in the world. Although the Syrian conflict is now involving Saudi Arabia, so far, there has been no great effect on Saudi Arabia’s economy.

Even before moving to Riyadh, you will obviously know that the country’s prosperity is largely founded on oil. The Kingdom of Saudi Arabia is currently a leading member of the OPEC – no wonder, since it’s also the country with one of the largest oil reserves worldwide! The petrochemical industry accounts for 45% of the GDP, 80% of the state’s budgeted revenues, almost 90% of all exports, and 90% of the earnings from the export sector.

The oil industry in Saudi Arabia is very much in the hands of the government. Saudi Aramco, a formerly US American petroleum company, was nationalized in the 1970s. Nowadays, it’s said to be one of the most important oil producers in the world.

In stark contrast to big business, the local Saudi economy is often dominated by small and mid-sized enterprises, frequently run by family members. Such family-owned SMEs working in Riyadh and other major cities are mostly active in trade. Since the desert nation has only a tiny agricultural sector and little industry other than petroleum, it needs to import lots of food, textiles, vehicles, and machinery. Thus, commerce and marketing seem a logical choice. Following the construction boom in Saudi Arabia over the last few years, the construction industry has thrived. Given that oil prices have been dropping, the growth in the construction industry has helped to continue to drive Saudi Arabia’s economic growth, while also helping to boost local business.

Employment in the Capital

Working in Riyadh is in some ways an anomaly since the urban economy is not dominated by the oil industry. As the capital, it is the seat of numerous government institutions and the public sector is the biggest employer. Most employees working in Riyadh’s ministries and other government offices are Saudis. Where does that leave the many foreign residents working in Riyadh?

Lots of migrants from African, South Asian and Southeast Asian countries toil in (potentially exhausting, dangerous, and underpaid) construction jobs. Those that fare somewhat better are employed in Riyadh’s service sector, e.g. in the hospitality industry or as taxi drivers.

Well-qualified expats are often found working in Riyadh’s diplomatic missions and spend their off-time in a compound. The Diplomatic Quarter, or “DQ”, is home to plenty of foreign embassies and cultural institutions. There are also the expat assignees of multi-national companies based in the Saudi capital. Big finance, high-end hotel chains, and defense contractors all have international staff working in Riyadh.

A Diversified Saudi Economy: New Opportunities for Expats

The Saudi government recognizes the importance of diversifying the economy. In the long run, they must end their exclusive dependence on the petrochemical sector, or the national economy will collapse once the oil reserves are exhausted. The plan to support other industries is also a chance for foreign companies, investors from abroad, or expatriates interested working in Riyadh.

Diversification is also opening up new opportunities, for both locals and expats moving to the country, in a variety fields: information and communication technology; natural gas production, to find an alternative to oil; power generation and renewable energies, to satiate the growing population’s demand for electricity; transportation, to transform a sprawling cityscape made for cars and to improve the nationwide transport infrastructure; recycling, waste water treatment, and desalination; medical equipment and healthcare in general, to maintain the hard-won quality of life.

Unemployment Battle: Is Saudisation the Solution?

The country will need an even larger, more industrious labor force to realize plans for economic diversification, from specialized university graduates to menial workers. Ironically, Saudi Arabia has a relatively high unemployment rate. As of January 2016, 5.6% of the population doesn’t have a job. Roughly two thirds of Saudi Arabia’s population is under the age of 30. Due the fact that large numbers of young people are entering the workface around the same time, the unemployment rate among young people is significantly higher. In 2015, the unemployment rate of Saudis between the ages of 16 and 29 stands at 29%.To increase the number of Saudi nationals working in Riyadh’s private sector and in all sorts of jobs, the government has repeatedly tried to push a “Saudisation” quota. In 2016, the minister of labor has launched a new “Saudisation” programme that has four stages. The aim is to reach at least partial if not total Saudisation in some industry sectors, in particular the retail sector. A law that was implemented in 2013 means that companies with more than 10 employees are classified according to four different categories (red, yellow, green, and premium), depending on the percentage of Saudi nationals among their staff. The poorer the company’s compliance with the quota, the more difficult it will be for their HR department to hire new foreigners, to renew work permits, etc. How this will affect expats living and working in Riyadh remains to be seen.

Saudi Arabia has finally realized that it has a national ‘reserve army’ of potential employees that it previously didn’t really use: young Saudi women. Many of them have a good tertiary education. The state-of-the-art campus of Riyadh’s Princess Noura bint Abdul Rahman University is an excellent example. The employment rate of women dramatically increased by 48% between 2010 and 2015, thanks to the late kings ruling that Saudi women can now be employed in retail. In 2013 the first Saudi female lawyers were allowed to practice.

However, few women are employed outside the home. Apart from several prominent Saudi businesswomen, who seem to be the proverbial exception to the rule, most are employed in education and healthcare. These two fields offer job opportunities for expat women who consider working in Riyadh for a while. Although more and more Saudis complete their medical training at home, a large percentage of the staff working in Riyadh’s clinics and health centers is still foreign-born. Female doctors and nurses are sought after for women’s and children’s hospitals.

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